Federal Court Judge Rules That Lending Discrimination Claims May Proceed

A federal court in San Diego ruled Monday that Plaintiff’s claims that lenders’ discretionary home mortgage pricing policies have a discriminatory impact on African American borrowers in violation of the Fair Housing Act (”FHA”) and the Equal Credit Opportunity Act (”ECOA”) may proceed.  See Taylor v. Accredited Home Lenders, Inc., Case No. 07-cv-0732. In denying Defendants’ motion to dismiss Plaintiff’s claims, which are asserted on behalf of herself and a class of similarly situated borrowers, United States District Court Judge John A. Houston wrote that “[t]he Ninth Circuit clearly recognizes the FHA and the ECOA permit discrimination claims under a theory of disparate impact as well as disparate treatment.”  Moreover, “[t]his Court finds Plaintiff sufficiently alleges Defendants engage in a ‘outwardly neutral practice’ though their discretionary pricing policy…[and] specifically identifies and challenges the policy of authorizing brokers to apply subjective, non-risk based factors to impose ‘rate mark-ups.”’  These allegations, along with “statistical information of the discriminatory affect on African Americans in the complaint[]” are sufficient, the Court held.

AA LLP Partner, Jennie Lee Anderson, who argued on behalf of Plaintiff and the class at the hearing, said that the Court’s ruling was correct.  “The FHA and the ECOA seek to ensure that all borrowers, regardless of their race, have equal access to credit and housing,” she said.  “The Court’s decision furthers those important policy goals,” Ms. Anderson said.  For more information regarding the decision or other inquiries regarding credit and housing discrimination, please contact an AA LLP attorney.

To view a copy of the Court’s Order in pdf, please click here.